UAE Banking Sector Faces Fresh AI Regulations Aimed at Customer Protection

The Central Bank of the UAE has rolled out new supervisory guidance to ensure the safe and responsible adoption of artificial intelligence across the country’s financial sector, as banks increasingly rely on digital technologies to deliver services.

The new framework applies to all licensed financial institutions and sets out clear expectations for how artificial intelligence and machine learning tools should be designed, deployed and monitored. The objective is to protect consumers, preserve financial stability and address emerging risks linked to automated decision-making.

Regulators said the guidance reflects a forward-looking approach to supervision, aimed at keeping pace with the rapid evolution of smart financial services while strengthening trust in digital banking systems.

Strong focus on governance and transparency

Under the new rules, banks and financial firms must establish robust governance arrangements to oversee the use of AI technologies. Key principles outlined in the framework include fairness and non-discrimination, transparency in automated decisions, and the ability to explain how AI-driven outcomes are reached.

The guidance also stresses the importance of maintaining meaningful human oversight over automated systems, ensuring that critical decisions are not left entirely to algorithms. In addition, strict standards for data management, privacy and security have been introduced to address growing concerns around the handling of sensitive customer information.

Encouraging innovation while protecting consumers

The Central Bank said the initiative is designed to support innovation without compromising consumer rights or operational integrity as financial institutions expand their use of advanced technologies.

“The guidance note establishes a clear framework for the responsible use of artificial intelligence and machine learning in the financial sector,” said Khaled Mohamed Balama, Governor of the Central Bank of the UAE. He added that the measures are intended to enhance consumer protection, strengthen governance and transparency, and reinforce the need for human oversight and data protection.

Supporting national digital goals

Officials noted that the new framework is aligned with the UAE’s broader artificial intelligence strategy and wider efforts to build a resilient, future-ready financial system. By setting consistent standards for AI use, the guidance is expected to promote sustainable innovation while maintaining public confidence in digital financial services.

The Central Bank said the measures will help ensure that emerging technologies are adopted responsibly, supporting long-term growth while upholding high standards of customer protection across the banking sector.